THE FAS RUSSIA PRESENTED AN ANALYTICAL RESEARCH OF THE MARKET FOR INNOVATIVE NICOTINE-CONTAINING PRODUCTS

Market participants also shared their practice of introducing and applying antimonopoly compliance.

On December 10, in the format of video conferencing, a meeting of the Expert Council under the FAS Russia on the Development of Competition in the Markets for Nicotine-Containing Products was held. It was attended by representatives of federal executive authorities, the business community, as well as the antimonopoly authorities of the Republic of Belarus and the Republic of Kazakhstan.

Alexey Dotsenko, Chairman of the Expert Council, Deputy Head of the FAS Russia, opening the meeting, noted:

“The issues on today's agenda, without any doubt, will in the near future be defining development of competition in the nicotine-containing products markets. During 2020, there were significant changes in the sectoral legislation regulating the market for innovative nicotine-containing products. In particular, the rules for its turnover were determined”.

In the frames of the event, the FAS Russia presented the first analytical research of the wholesale market for nicotine-containing products and devices designed for the usage of nicotine in ways other than smoking tobacco.

Natalia Isaeva, Deputy Head of the Fiscal Control Department of the FAS Russia, spoke about the product and geographical boundaries of the market, about the existing barriers to entry for new players, highlighting the significant initial capital investments and investment risks.

“Now we see the structure of the new market, we can already note its specifics and set important tasks for ourselves to develop competition within its boundaries in the future”, - said Alexey Dotsenko

“Measures to increase the interest of manufacturers of innovative nicotine-containing products in their sales mainly for export, as well as requirements for tracking its movement and distribution when crossing the Russian state border within the EAEU are needed”, - added Vladimir Mishelovin, Head of the Fiscal Control Department of the FAS Russia.

The participants of the meeting also discussed the practice of introducing and applying antimonopoly compliance, including in connection with the entry into force of Article 9.1 of the Law on Protection of Competition, which provides the possibility of notification by the FAS Russia of the acts regulating it. The speakers emphasized that the antimonopoly compliance system should work in reality and not be a paper-based set of rules and requirements.

“Companies that have real market power, but do not yet use the antimonopoly compliance mechanism, should pay attention to the experience of colleagues who are already using this important tool of warning, prevention and avoiding violations of the antimonopoly legislation”, - said Alexey Dotsenko.

The representatives of the expert community paid special attention to discussing the issues and threats of illegal trade in nicotine-containing products. As effective measures to combat illegal traffic in the adjacent market (tobacco markets), were noted as the establishment of a single minimum price for tobacco products and their mandatory labeling. For innovative products, experts, among other things, proposed the introduction of an excise stamp for electronic nicotine delivery systems and the harmonization of excise taxes within the EAEU.

At the end of the meeting, the First Deputy Chairman of the Committee on Budgets and Taxes of the State Duma of the Russian Federation - Sergey Katasonov noted that the Expert Council was attended by representatives of the majority of market participants.

“The exchange of views on the most topical issues of the industry turned out to be productive, and the proposals of experts can be useful for the deputy corps in legislative activities”, - Sergey Katasonov shared his outcome of the meeting.

He also drew attention to the need to take measures to combat illegal products, including by prevention the sale of nicotine-containing products without excise stamps and special Russian stamps on the territory of the Russian Federation, as well as a single minimum price for tobacco products.

For reference:

The Expert Council is a consultative and advisory body under the FAS Russia, formed to analyze the state of competition in the nicotine-containing product markets, as well as to prepare system proposals.